As New Jerseyites prepares to vote on legalization in November election, the governor of neighboring Pennsylvania has urged that state’s lawmakers to pass REC legislation.
In a Tuesday press conference, Pennsylvania Gov. Tom Wolf (D) discussed legalization in terms of helping Pennsylvanians, especially small businesses, during the pandemic. He and Lt. Gov. John Fetterman (D) called for the state legislature to legalize last summer, partly for the tax revenue from such a move—an argument he made again this summer.
Among other proposals, Wolf’s fall legislative agenda aims to legalize and devote part of the tax revenue to benefit small businesses, including historically disadvantaged ones. Revenue would also fund programs that help crime victims and minority communities disproportionately harmed by cannabis criminalization.
It’s unclear if the Republican-controlled state legislature is on board. “There was some appetite for it before and my hope is that with the pandemic and the hit that we’ve taken to revenues, that there might be a little more interest in it right now,” he said. National polls consistently show Republican voters’ support for legalization.
Wolf also noted that the state has had time to observe legalization in places like Colorado. He acknowledged that the tax revenue would not immediately materialize, but that the state could start the process now.
In a contrast to other legal states, he suggested a network of state dispensaries could be an “ideal” structure. Asked about concerns related to driving and social costs from legalizing, Wolf said such issues are “all the more reason why you’d want to actually legalize it and have it regulated.”
“The way it should have always been”
In an interview, Lt. Gov. Fetterman, a vocal legalization supporter, pointed to more states enacting REC. New Jersey soon could. Massachusetts recently started its market, Maine will in the fall and Fetterman expects New York to follow. With the pandemic and its financial implications, he called REC a “necessary revenue stream that Pennsylvania’s going to need.”
“It’s an inevitability. It’s just a matter of when,” Fetterman said of REC. “It’s a true no-brainer.”
He pointed to majority support from Democrats and strong support among Republicans, although Republicans controlling the legislature have resisted the move.
“It’s politics. That’s all it is,” Fetterman said, along with some “residual reefer madness.”
He points to states like Montana and South Dakota, which could legalize REC in the upcoming election. “It’s not like they’re liberal paradises,” he said.
Fetterman called for legalization while running for U.S. Senate in 2015. Now, he says the Black Lives Matter movement further highlights the racial disparity in prohibition, which he saw first hand as mayor of Braddock, Pa., outside Pittsburgh. He connects prohibition with crime, violence, wasted law enforcement resources and the lasting harm an arrest can have for a young person.
“It stays with you the rest of your life, unless you get a pardon,” he said.
He calls that “absurd.” His official website encourages anyone with a nonviolent cannabis-related conviction to pursue an expedited application for a pardon, and links to a free application for any type of pardon request.
“I just want it to be safe, legal, taxed, and in service of the greater good,” he said. “The way it should have always been.”
“Hope springs eternal”
Longtime legalization activists applauded Wolf’s renewed push.
“The governor’s been a proponent of legalization for quite some time,” said DeVaughn Ward, senior legislative counsel with Marijuana Policy Project. “But unfortunately, the legislature is controlled by Republicans” who haven’t supported the move.
Ward expressed concerns with Wolf’s proposal for the state to run pot shops. Utah and Rhode Island have considered similar measures which he said could put states at odds with the federal government.
The REC calls from the governor’s office are welcome, he said, “but it really depends on the legislature” where a “huge philosophical shift” is necessary to legalize.
“We’ve heard rumblings” that the legislature may seek new revenue sources because of the COVID’s impacts on the economy, he said. He noted that New Jersey’s legalization—“a short drive away”—would let Pennsylvania residents access legal weed while giving that state none of the benefits.
“Hope springs eternal. We’re always optimistic that folks will come around,” he said. “It’s really up to the political will.”
NORML also praised Wolf’s press conference.
Setting up a structure
Tax experts are also watching as more states set up regulatory systems. Ulrik Boesen, senior policy analyst with the nonpartisan Tax Foundation, stressed that Wolf’s announcement included no detailed proposal. But Wolf did mention that REC would not be a revenue generator in the short-term, Boesen noted.
“Short-term revenue should not be your primary reason” to legalize, Boesen said.
Developing a market and getting the regulations right can take a couple of years, he said. For example, he warned over-taxing a new market can hamstring it, depressing tax revenue later.
In general, Boesen also advised against tying revenue from a cannabis excise tax–a tax on a specific product–to general spending like for roads and parks. “That’s not sound tax policy,” he said, noting how consumers’ behavior can change over time and result in less funding for those areas. He points to smoking and cigarette taxes as an example, with fewer smokers now than in the past. Excise tax revenue should instead fund programs related to the product, he said.
He said Wolf’s comments about connecting revenue to related programs reflect those ideas, but how things play out depends on what legislators draft.
Boesen compares various states’ efforts at crafting regulations to the years after alcohol prohibition, and attempts to get taxes right so legal liquor could compete with the illegal market.
“It’s sort of a similar exercise that the states have to go through,” he said. And it’s important that they get it right, especially with no federal framework.
It’s also a bit of a competition in the early years. Boesen pointed to the chance for nearby New Jersey to legalize soon.
“You definitely don’t want your residents driving to a neighboring state” to buy cannabis, he said. “We see it with cigarettes all the time…If there’s a buck to be saved.”
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